China home prices gain in half the cities

The Pak Banker - - Front Page -

BEI­JING

China's new home prices rose in Oc­to­ber in more cities than the pre­vi­ous month, in­di­cat­ing the gov­ern­ment will re­frain from re­lax­ing curbs on the prop­erty mar­ket.

Prices climbed in 35 of the 70 cities the gov­ern­ment tracks, com­pared with 31 in Septem­ber, ac­cord­ing to data from the sta­tis­tics bureau yes­ter­day. Prices fell in 17 cities.

In­vestors are gaug­ing the gov­ern­ment's pol­icy di­rec­tion on real es­tate, rolled out over two years to rein in surg­ing home prices that raised con­cerns about af­ford­abil­ity, af­ter the Com­mu­nist Party un­veiled the new gen­er­a­tion of lead­ers last week.

The mea­sures have had a "rel­a­tively good" ef­fect and the gov­ern­ment will "stead­fastly" en­force prop­erty con­trols, Hous­ing Min­is­ter Jiang Weixin said in Bei­jing last week.

"The gov­ern­ment has sent out sig­nals that they will not loosen prop­erty poli­cies be­cause they don't want to see a big price re­bound," said Shen Jian-guang, a Hong Kong­based econ­o­mist at Mizuho Se­cu­ri­ties Asia Ltd.

"At the Na­tional Peo­ple's Congress next March, it prob­a­bly could claim vic­tory for con­trol­ling prop­erty prices." Del­e­gates and of­fi­cials gather ev­ery March for the an­nual meet­ing of the Na­tional Peo­ple's Congress, the high­est gov­ern­men­tal body.

The north­west­ern city of Urumqi led gains in Oc­to­ber, with a 0.5 per­cent in­crease from Septem­ber, ac­cord­ing to the data. Among ma­jor cities, the south­ern busi­ness hubs of Guangzhou and Shen­zhen recorded gains of 0.4 per­cent each. Bei­jing prices rose 0.2 per­cent, while those in Shang­hai and 17 other cities were un­changed.

A gauge track­ing prop­erty shares on the Shang­hai Composite In­dex (SHCOMP) fell 0.5 per­cent to the low­est in three weeks at the lo­cal close, mak­ing it the only mea­sure that de­clined among the five in­dus­try groups on bench­mark.

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